The 3 Big Myths About Rental Prices
By Marc Goodin
First I want to show you a chart for the 22 self storages near my Coventry self storage. As you can see there is a huge difference between the low & high prices and even between the average and the high prices.
Average Rental Rates Coventry & Area
The high prices are mine and I can tell you increasing your rates 25% will increase your profits by 50% and more!
ONE
You will get more rentals and make more money if your rates are in the middle of the pack or on the low end of the rental scale.
There is nothing further from the truth, in fact I can find the price leaders in any city and they will be the ones making the most money. There is no other business where the owners (and managers) lack the basics of a retail business (or just are making to much to care or put in the time.) This can be observed by the fact that so many facilities are full but have not raised their rents (in years). Have you ever seen another business that would not raise their rates when there is such demand? These facilities would make more money with higher rates at 95% full.
By providing the tools and training a manager, the sale manager will surprise and delight clients and provide the “just right feeling” and price will not be a factor. Once you help clients understand and see you are a premium self storage they will be happy to pay for your services
We have the best guarantee in the business and we share it with every customer even before they walk in the door! They know we care about them and their stuff immediately – priceless!
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Most owners have let their facility become a commodity by having order takers for managers and not having trained sales managers run their facility. The difference is not what is between the four walls of a unit but what is on the out side of the walls. A Commodity is a product or service that no one cared enough about to market and thus has to compete on price. Marketing and sales managers create value by combining stories, design, care and over the top service.
The problem is it takes experience and work to provide the systems, manuals, guidance and training. Starting day one I would rather insure managers know how to really explain the price and understand the basic sales and marketing, then literally leave tons of profit on the table every month. And that is why Storage Authority has developed Dynamic Ease Series for all aspects of self storage.
Our managers are required to email us immediately if someone did not rent because of our (higher) prices and provide their phone number and tell us what they said about price. After training I rarely get such an email but when I do once or twice a year I love to give them a call and rent to them.
TWO Most renters choose where to rent based upon price.
There is nothing further from the truth, in fact price is often 6 or 7 down on the list. Many managers think price is the major factor in choosing a self storage because this is the first question a prospect often ask. But customers ask this because they do not know what else to ask. Competing on price is absolutely the worst feature to use to build a profitable self storage. During the next 5 site walks to show units have your managers ask prospects what is important to them and price will be down on the second half of the list.
The manager’s simple do not know how to make a sale and in most cases do not even take a prospect for site walk to get to know them or know how to ask for the rental. People do not window shop for self storage. Typically, they are going to rent from you or someone else in the next week.
THREE It is a lot of work to keep up with the competitions prices I don’t really need to do that.
Again a myth. The competitions prices are simple to get with a few strokes on your key board. I use http://www.stortrack.com I can check the competitions prices when every I want and Stortrack even send me alerts when prices change. Us our code Price20 and save 20%. They have a couple of great options to get quick mini reports when you looking at new sites.
They provide the data in a couple of great formats for easy use. Here is a couple of screen shots of my facilities rates and my competition rates. As you can see there is a huge difference for form the low, average and highest. And Coventry Facility is the price leader!
The low is 70 and we are the high at $123 and the average is $100 but would be much lower if you took us out. We are 23% higher than the average and we about to raise rates for the spring.
I need the competitor prices to insure I am the highest. I even bring my price list to all my competition and let them know how high I am. Hopefully this get them to raise their prices a bit. But more importantly when they run out of a size a customer needs they refer them to me. My competition is one of my major sources of leads. They think customers will come back to them one day because they charge less but it never happens
The 5 x 5 average is $49/mo and the high is at my Competition Mansfield Self Storage but don’t worry I own that facility too! Wow we are 60% higher than the average!
BONUS Quick tips how to over come the price objection
Most people do not rent is because they were never asked if they wanted to rent. So ask 3 times, “lets get that 10 x 10 in your name”
Many people did not rent because you did not overcome their concerns. There are only seven typical concerns so its time to learn them and their responses. So again ask if they want to rent and them overcome their concerns.
Potential renters bring up prices in typically one of the two following ways:
Potential Renter: That’s high
Your response: Why do you say that?
Now you can over come their concern and rent. You will be amazed at the answers. The only price concern you really have to compete with is, so & so down the street is cheaper by $20 and that’s simple: I am sure you can agree we are different and we provide exception value. As you shake you head yes ask would you like to get that unit in your name. The key is not saying anything and let them response. They either rent or come up with the real concern you can overcome.
Never Never match prices. After the customer understands your value, you are much better off asking are you ready to rent today? And if they say yes, then offer them a $25 off the first month rent and add in free lock, if they want more. One time discounts are so much better then ongoing monthly discounts.
Question: Can you give me a better price?
Your Response: I understand your concern. You want to get the most value for your money. From what I shared with you I am sure you can agree we provide exceptional value. We keep our rates as low as possible and still provide the services all our clients expect. Would you like to get that 10 x 10 in your name today as you put the lease on the counter.
Marc Goodin is President of Storage Authority Franchising, the best Franchise for the busy professional. He owns 3 self storages he designed, built and manages. He has been helping others in the self storage industry for over 25 years. He can be reached at marc@StorageAuthority.com or directly at 860-830-6764 to answerer your development, marketing, sales and operations questions.